The Federal Trade Commission said kidney-dialysis chain DaVita, Inc. must divest its ownership interest in seven New Jersey clinics and two Dallas area clinics to resolve charges that its $358 million acquisition of competitor Renal Ventures Management, LLC would be anticompetitive. The clinics will be divested to Physicians Dialysis/GMF Capital joint venture PDA-GMF Holdco.
According to the FTC, DaVita is the second-largest provider of outpatient dialysis services in the United States. Renal Ventures is the seventh-largest.
The complaint alleged the acquisition would negatively impact competition in the New Jersey markets of Brick, Clifton, Somerville, Succasunna, and Trenton, and in the Dallas-area markets of Denton and Frisco, where DaVita and Renal Ventures are direct competitors.
[Also: Northwell Health, Davita join forces to deliver, expand kidney care services]
"The merger would represent either a merger to monopoly or a reduction of competitors from three to two. Without that competition, the likely result would be reduced quality and higher prices for dialysis patients," the FTC said.
The proposed settlement stipulates that DaVita, Inc. must obtain agreements from each divested clinic's medical director to continue providing physician services after it transfers ownership, as well as consent from landlords to transfer leases for the facilities. PDA-GMF Holdco will also have the opportunity to hire employees from the divested clinics.
[Also: DaVita buys Renal Ventures for $415 million, adds 36 dialysis centers]
DaVita must also provide transition services for as long as two years, and the FTC is empowered to appoint a monitor to ensure their compliance.
Public will be taken through April 27, 2017. After that the FTC will decide whether to make the proposed consent order final.
Twitter: @BethJSanborn